Case Name: APTFrame, Inc., et al. v. Jane Vaillancourt, et al.
Case No.: 2013-1-CV-247318

Currently before the Court is the motion by plaintiffs APTFrame, Inc. (“APTFrame”) and Vaughn Paladin (“Paladin”) (collectively, “Plaintiffs”) for summary judgment or, alternatively, summary adjudication against defendants Seema Nair (“Nair”), Global Anchorage, Inc. (“GA”), Jane Vaillancourt (“Vaillancourt”), and NetApp, Inc. (“NetApp”) (collectively, “Defendants”).

Factual and Procedural Background

This is an action for defamation and interference with contractual relations. Paladin is a shareholder and the president of APTFrame and Arcsona, Inc. (“Arcsona”). (Fifth Amended Complaint (“5AC”), ¶¶ 1-2, 12.) Paladin was also employed by APTFrame as a Senior Program Manager for NetApp pursuant to a Statement of Work. (Id. at ¶ 12.) APTFrame, GA, and Appirio, Inc. (“Appirio”) each provided temporary technology resources for various NetApp projects pursuant to written consulting agreements. (Id. at ¶ 10.) In addition, APTFrame and Arcsona provided technology resources for Appirio pursuant to independent contractor agreements between the parties. (Id. at ¶ 11.)

On June 4, 2012, Vijay Myneni (“Myneni”), a temporary technology resource employed by GA, approached Paladin concerning a position with APTFrame. (5AC, ¶ 13.) Myneni told Paladin that: (1) his GA contract with NetApp was finished; and (2) the president of GA—Nair—told him that there was no additional work for him at GA. (Id. at ¶¶ 6, 13.) Paladin was aware of an open position at NetApp through Appirio, and Myneni was immediately interviewed and hired for that position. (Id. at ¶ 14.) Two days later, Myneni informed Nair “that he would be taking the Appirio position.” (Id. at ¶ 15.)
On June 7, 2012, Nair met with Paladin. (5AC, ¶ 16.) During the meeting, Nair accused Paladin “of ‘stealing’ Myneni from [GA].” (Ibid.) Paladin explained that Myneni approached him seeking work and he “acted only after ascertaining that [GA] could not provide other work for Myneni.” (Ibid.) Myneni later approached Nair and also explained that Paladin and APTFrame “had not sought to ‘steal’ him.” (Id. at ¶ 17.)

In spite of Paladin and Myneni’s explanations, on June 7, 2012, Nair “told one or more employees of [NetApp],” including Vaillancourt, an executive employee and managing agent of NetApp, “that [Paladin and APTFrame] had ‘stolen’ Myneni from [GA].” (5AC, ¶¶ 4, 18.) That same day, Vaillancourt terminated Paladin’s role as a Senior Program Manager under NetApp’s contract with APTFrame even though Paladin explained to her what really occurred with Myneni. (Id. at ¶¶ 19-20, 24.)

Paladin’s removal from his Senior Program Manager position was the start of a campaign by Vaillancourt to interfere with the contractual relationship between APTFrame and NetApp. (5AC, ¶ 24.) In furtherance of this campaign, Vaillancourt terminated two other APTFrame managers working on projects for NetApp. (Ibid.) She also told an Appirio employee, Carl Krupitzer (“Krupitzer”), that “[Paladin and/or APTFrame] had poached or attempted to poach employees of other contractors who worked at [NetApp].” (Ibid.) Krupitzer “understood this to mean that [Paladin and/or APTFrame] had acted unlawfully or unethically.” (Ibid.) Vaillancourt continued to republish Nair’s alleged defamatory statement throughout 2013. (Id. at ¶¶ 18, 24-25.) Furthermore, Vaillancourt instructed other NetApp employees to refrain from hiring APTFrame employees for NetApp projects. (Id. at ¶ 24.) Vaillancourt also told Appirio’s chief executive officer that NetApp would no longer do business with APTFrame employees and requested that he replace any employees affiliated with APTFrame who were working on NetApp projects for Appirio. (Id. at ¶ 25.) Since October 2012, Appirio has not selected APTFrame employees for any of the projects it has with NetApp. (Ibid.) Finally, Vaillancourt arranged for NetApp’s termination of intern contracts with APTFrame, and refused to use any of APTFrame’s resources on projects under her control. (Id. at ¶¶ 27-28.)

Based on the foregoing, Plaintiffs filed the operative 5AC against Defendants on January 11, 2018. The 5AC alleges causes of action for: (3) defamation per se (against Nair and GA); (4) intentional interference with contractual relations (against Vaillancourt and NetApp); and (7) violations of Business and Professions Code section 17200 (against Vaillancourt and NetApp).

On January 24, 2018, Plaintiffs filed the instant motion for summary judgment or, in the alternative, summary adjudication against Defendants. Vaillancourt and NetApp (collectively, “NetApp Defendants”) filed a joint opposition to the motion on March 27, 2018. To date, Nair and GA (collectively, “GA Defendants”) have not filed papers in opposition to the motion.

Discussion

I. Legal Standard on Motions for Summary Judgment/Adjudication

A motion for summary judgment shall be granted when all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) Where a plaintiff moves for summary judgment, the plaintiff bears the initial burden of showing that there is no defense to a cause of action by proving each element of the cause of action entitling the plaintiff to judgment. (Code Civ. Proc., § 437, subd. (p)(1); Paramount Petroleum Corporation v. Super. Ct. (2014) 227 Cal.App.4th 226, 241.) If the plaintiff makes such a showing, the burden then shifts to the defendant to show that a triable issue of one or more material facts exists as to a cause of action or a defense thereto. (Ibid.)

“Summary adjudication works the same way, except it acts on specific causes of action or affirmative defenses, rather than on the entire complaint. A summary adjudication is properly granted only if a motion therefor completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. Motions for summary adjudication proceed in all procedural respects as a motion for summary judgment.” (Hartline v. Kaiser Foundation Hospitals (2005) 132 Cal.App.4th 458, 464, internal citations omitted.)

For purposes of establishing their respective burdens, the parties involved in a motion for summary judgment or adjudication must present admissible evidence, which is to say the motion is evidentiary in nature and cannot be based solely upon the allegations in a complaint. (Saporta v. Barbagelata (1963) 220 Cal.App.2d 463.) In ruling on the motion, however, a court cannot weigh the evidence presented or deny summary judgment or adjudication on the ground any particular evidence lacks credibility. (Melorich Builders v. Super. Ct. (1984) 160 Cal.App.3d 931, 935; Lerner v. Super. Ct. (1977) 70 Cal.App.3d 656, 660.) As summary judgment “is a drastic remedy eliminating trial,” the court must liberally construe evidence in support of the party opposing summary judgment and resolve all doubts concerning the evidence in favor of that party. (See Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 717-718.)

II. Motion as to the GA Defendants

Plaintiffs move for summary judgment of the 5AC as alleged against the GA Defendants. (Ps’ Ntc. Mtn., pp. 1:25-2:10.) As the third cause of action is the only remaining claim alleged against the GA Defendants, Plaintiffs are entitled to summary judgment of the 5AC as alleged against the GA Defendants if they can prove each element of their claim for defamation per se.

A. Plaintiffs’ Request for Judicial Notice

Plaintiffs’ request for judicial notice is GRANTED as to the definition of the term “poach,” the existence of the subject court records, and the truth of the results reached in court orders. (See Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264 (Fontenot) [“ ‘ “ ‘Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter.’ ” ’ ”]; see also Evid. Code, § 451, subd. (e) [judicial notice of certain matters is mandatory, including “[t]he true signification of all English words and phrases and of all legal expressions.”]; People v. Whitlock (2003) 113 Cal.App.4th 456, 462 (Whitlock) [“[t]o ascertain the common meaning of a word, ‘a court typically looks to dictionaries’ ”]; California Public Records Research, Inc. v. County of Stanislaus (2016) 246 Cal.App.4th 1432, 1445 (California Public Records Research) [taking judicial notice of dictionary definitions is appropriate]; People v. Woodell (1998) 17 Cal.4th 448, 455 (Woodell) [a trial court may “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.”].)

B. Allegations of the Third Cause of Action

In the third cause of action for defamation per se, Plaintiffs allege that “[Nair] falsely accused [them] of trying to steal … Myneni, a [GA] resource whose contract with [NetApp] had terminated” on June 7, 2012. (5AC, ¶ 48.) Nair allegedly “made those defamatory statements to numerous employees of [NetApp], including [Vaillancourt], and others.” (Ibid.) Additionally, Nair allegedly “told then NetApp manager Tom Mirrione [(‘Mirrione’)] that [P]laintiffs had attempted to poach Myneni from [GA] by offering him a job, and had acted unethically in doing so.” (Ibid.) “Mirrione understood that [Nair’s] defamatory accusations were attributed to [Plaintiffs], and that [Nair] was accusing [P]laintiffs of poaching or attempting to poach Myneni from [GA].” (Ibid.) Furthermore, Nair allegedly told Vaillancourt that Plaintiffs offered Myneni “a job on Project OnRamp, the same project he had been working on through [GA], and that [P]laintiffs acted unethically in doing so.” (Ibid.)

Plaintiffs also allege that Vaillancourt later “stated in writing to [NetApp] employee or agent Rafael Solorio [(‘Solorio’)] that [Paladin] had poached the resources of other [NetApp] vendors. [Solorio] republished said defamatory and untrue statements to [NetApp] employee or agent Amy Nguyen [(‘Nguyen’)] on March 14, 2013, and [Nguyen] republished said defamatory and untrue statements to [NetApp] employee or agent Ted Herzog [(‘Herzog’)] on or about July 12, 2013.” (5AC, ¶ 48.) Plaintiffs allege that “[i]t was reasonably foreseeable that the defamatory ‘stealing’ or ‘poaching’ allegations of [the GA Defendants] would be republished as alleged.” (Ibid.)

Based on the foregoing, Plaintiffs allege that “[i]n falsely accusing [them] of ‘stealing’ Myneni, [Nair] acted intentionally or with reckless disregard of the consequences of her actions.” (5AC, ¶ 49.) Plaintiffs also allege that GA is liable for Nair’s conduct under the doctrine of respondeat superior. (Id. at ¶ 50.) As a result of Nair and GA’s conduct, Paladin allegedly suffered lost wages and APTFrame suffered lost income and profits. (Id. at ¶¶ 51-52.)

C. Legal Standard for Defamation Claims

“The tort [of defamation] involves the intentional publication of a statement of fact which is false, unprivileged, and has a natural tendency to injure or which causes special damage.” (Ringler Associates Inc. v. Maryland Cas. Co. (2000) 80 Cal.App.4th 1165, 1179 (Ringler); Wong v. Jing (2010) 189 Cal.App.4th 1354, 1369 (Wong) [“The elements of a defamation claim are (1) a publication that is (2) false, (3) defamatory, (4) unprivileged, and (5) has a natural tendency to injure or causes special damage.”]; see Civ. Code, §§ 44, 45, 45a, 46.)

Defamation is effected by libel or slander. (Civ. Code, § 44.) Slander is a false and unprivileged publication, orally uttered, which: (1) charges any person with crime, or with having been indicted, convicted, or punished for crime; (2) imputes in any person the present existence of an infectious, contagious, or loathsome disease; (3) “[t]ends directly to injure him in respect to his office, profession, trade or business, either by imputing to him general disqualification in those respects which the office or other occupation peculiarly requires, or by imputing something with reference to his office, profession, trade, or business that has a natural tendency to lessen its profits;” (4) imputes impotence or a want of chastity; or (5) “[w]hich, by natural consequence, causes actual damage.” (Civ. Code, § 46.) “A slander that falls within the first four subdivisions of Civil Code section 46 is slander per se and require no proof of actual damages. [Citation.] “A slander that does not fit into those four subdivisions is slander per quod, and special damages are required for there to be any recovery for that slander. [Citation.]” (Regalia v. Nethercutt Collection (2009) 172 Cal.App.4th 361, 367; Burrill v. Nair (2013) 217 Cal.App.4th 357, 382 [“[C]ertain slanderous statements are considered slanderous per se, and actionable without proof of special damage. However, the slander statute expressly limits slander per se to four categories of defamatory statements.”].)

D. Analysis

Plaintiffs argue that they are entitled to summary judgment of the 5AC against the GA Defendants because each element of their claim for defamation per se is proven by their undisputed material facts. (Ps’ Mem. Ps. & As., p. 2:11-12.) Specifically, Plaintiffs argue that Nair slandered them when she told Vaillancourt and Mirrione that they attempted to hire, poach, or steal Myneni (Id. at pp. 2:22-3:10, 6:8-16); Vaillancourt understood Nair’s accusations to be directed at them (id. at p. 3:11-15); Nair’s accusations were false because they did not attempt to poach Myneni or otherwise act unethically (id. at pp. 3:15-4:16, 6:17-24); Nair acted recklessly when she made the statements because she knew the accusations were false (id. at pp. 4:17-5:10); Nair’s statements were the proximate cause of their injuries (id. at pp. 5:11-633); and the GA Defendants are liable for the subsequent republications of Nair’s statements (id. at pp. 7:15-8:19).

With respect to the element of publication, the evidence offered in support of Plaintiffs’ undisputed material facts does not support Plaintiffs’ assertion that Defendants accused Plaintiffs of attempting to “steal” Myneni. (See Undisputed Material Fact (“UMF”) Nos. 3-4 and 34; see also Kelly Dec., Ex. A, pp. 115:22-116:24, 118:12-15, and 123:22-18, Ex. B, pp. 63:12-15, 68:3-17, 114:20-115:3, 207:17-18, and 208:11-14, and Ex. E, pp. 22:13-23:25, 28:9-19, 48:22-49:7, and 50:12-21; Ps’ Request for Judicial Notice (“RJN”), Ex. 7, ¶ 14-15.) Plaintiffs do not present any evidence demonstrating that Nair told a third party that Plaintiffs attempted to “steal” Myneni. At most, Plaintiffs’ evidence shows that Nair told Vaillancourt and Mirrione that Plaintiffs attempted to hire or poached Myneni and she believed such conduct was unethical. (See UMF Nos. 1-4 and 34; see also Kelly Dec., Ex. A, pp. 115:22-116:24, 118:12-15, and 123:22-18, Ex. B, pp. 63:12-15, 68:3-17, 114:20-115:3, 207:17-18, and 208:11-14, and Ex. E, pp. 22:13-23:25, 28:9-19, 48:22-49:7, and 50:12-21; Ps’ RJN, Ex. 7, ¶ 14-15.)

Next, Plaintiffs fail to present reasoned argument or legal authority showing that the subject statements—that Plaintiffs attempted to hire or poached Myneni—constitute slander per se, i.e., that the statements are defamatory. Plaintiffs simply assert in a conclusory manner that Nair’s alleged statements are slanderous. (Ps’ Mem. Ps. & As., pp. 1:7-15, 2:22-25, 4:19-20, 5:16-28, 6:7-8 and 26-27, and 7:10-14.) Plaintiffs do not discuss the four categories of statements that are considered slanderous per se under Civil Code section 46 or attempt to show that Nair’s statements fit within one of those categories. Consequently, Plaintiffs fail to meet their initial burden to show that the statements are slanderous per se. (See Badie v. Bank of America (1998) 67 Cal.App.4th 779, 784-785 (Badie); see Schaeffer Land Trust v. San Jose City Council (1989) 215 Cal.App.3d 612, 619, fn. 2 (Schaeffer) [“[A] point which is merely suggested by a party’s counsel, with no supporting argument or authority, is deemed to be without foundation and requires no discussion.”].)

With respect to the element of falsity, Plaintiffs’ initially contend they are not required to prove that Nair’s statements are false. (Ps’ Mem. Ps. & As., pp. 2, fn. 1 and 3:17-18.) In support of their contention, Plaintiffs’ cite Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 741-42 (Brown). However, Brown does not support Plaintiffs’ position. Brown merely stands for the proposition that a claim for defamation against a private individual does not require a showing of malice; instead, the plaintiff need only show that the individual failed to use reasonable care in ascertaining the truth or falsity of the matter. (See ibid.) Brown does not provide that a plaintiff can prevail on a claim for defamation without proving that the alleged defamatory statement is false. Furthermore, it is well-established that a plaintiff must prove that the alleged defamatory statement is false to prevail on a claim for defamation. (Ringler, supra, 80 Cal.App.4th at p. 1179; Wong, supra, 189 Cal.App.4th at p. 1369; see Swaffield v. Universal Ecsco Corp. (1969) 271 Cal.App.2d 147, 164 [“Truth is a complete defense against civil liability for defamation regardless of the bad faith or malicious purpose of the publisher of the material.”].)

Notwithstanding the foregoing, Plaintiffs also attempt to show that Nair’s statements—that they attempted to hire or poached Myneni and their conduct was unethical—were false. However, Plaintiffs’ undisputed material facts and evidence demonstrate that there is a triable issue of material fact as to whether the statements were false. Specifically, Plaintiffs’ undisputed material facts and evidence establish that: on or about his last day of work with GA, Myneni contacted Paladin regarding additional work or a position; Paladin informed Myneni that he might have a position available through Appirio; Paladin set up an interview for Myneni with Appirio; Myneni was accepted for the Appirio position through AptFrame; and Paladin told Myneni that he had received the position and could start almost immediately. (See UMF Nos. 40-43; see also Paladin Dec., ¶¶ 4-6.) A reasonable jury could infer from these facts that Plaintiffs attempted to hire Myneni or attract Myneni away from GA, i.e., “poach” Myneni. (See Ps’ RJN, Ex. 2 [defining the term “poach” as “to attract (someone, such as an employee or customer) away from a competitor”].) Furthermore, although Plaintiffs assert that “Paladin did not act unethically in any respect” (Ps’ Mem. Ps. & As., p. 4:15-16), they do not explain what ethical standards apply to a person in Paladin’s position or demonstrate that Paladin complied with the same. Consequently, there is a triable issue of material fact as to whether Nair’s statements were false.

E. Conclusion

For these reasons, Plaintiffs’ motion for summary judgment of the 5AC as alleged against the GA Defendants is DENIED.

III. Motion as to the NetApp Defendants

Plaintiffs move for summary judgment of the 5AC as alleged against the NetApp Defendants or, alternatively, summary adjudication of the fourth and seventh causes of action. (Ps’ Ntc. Mtn., pp. 1:25-2:16.)

A. Requests for Judicial Notice

1. Plaintiffs’ Request

Plaintiffs’ request for judicial notice is GRANTED as to the definition of the term “poach,” the existence of the subject court records, and the truth of the results reached in court orders. (See Fontenot, supra, 198 Cal.App.4th at p. 264 [“ ‘ “ ‘Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter.’ ” ’ ”]; see also Evid. Code, § 451, subd. (e) [judicial notice of certain matters is mandatory, including “[t]he true signification of all English words and phrases and of all legal expressions.”]; Whitlock, supra, 113 Cal.App.4th at p. 462 [“[t]o ascertain the common meaning of a word, ‘a court typically looks to dictionaries’ ”]; California Public Records Research, supra, 246 Cal.App.4th at p. 1445 [taking judicial notice of dictionary definitions is appropriate]; Woodell, supra, 17 Cal.4th at p. 455 [a trial court may “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.”].)

2. The NetApp Defendants’ Request

The NetApp Defendants’ request for judicial notice is GRANTED as to the existence of the subject court records and the truth of the results reached in court orders. (See Woodell, supra, 17 Cal.4th at p. 455 [a trial court may “take judicial notice of the existence of judicial opinions and court documents, along with the truth of the results reached—in the documents such as orders, statements of decision, and judgments—but [the court] cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact.”].)

B. Fourth Cause of Action

In the fourth cause of action for intentional interference with contractual relations, Plaintiffs allege that Vaillancourt “embarked on a plan to destroy or severely curtail the business income of [Paladin].” (5AC, ¶ 56.) As part of that plan, she interfered with the contractual relations between APTFrame and Appirio. (Ibid.) Vaillancourt interfered by: telling “one or more of her direct reports not to permit [APTFrame] to provide any additional contract workers for [NetApp] through its contract with Appirio”; making “false and defamatory statements to employees of Appirio alleging that [Paladin and APTFrame] had acted unethically, and told Appirio that it could no longer assist [APTFrame] in providing resources for [NetApp]”; and causing “the removal of [Bulusu] from his position as a [NetApp] resource, or refused to hire him, simply because of his contract with [APTFrame].” (Ibid.) Vaillancourt was allegedly “aware of a contractual relationship between [APTFrame] and Appirio whereby [APTFrame] provided resources for [NetApp] and others through Appirio.” (Id. at ¶ 58.) As a result of Vaillancourt’s alleged interference, APTFrame “has not been able to place any of its resources with [NetApp] or any other entity through Appirio since October 2012.” (Id. at ¶ 59.) Additionally, Paladin suffered lost wages, damage to his reputation, and severe emotional distress, and APTFrame suffered loss of income and profits. (Id. at ¶¶ 61-62.) Plaintiffs also allege that NetApp is liable for Vaillancourt’s conduct under the doctrine of respondeat superior. (Id. at ¶ 60.)

“The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant’s intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.)

Plaintiffs argue that they are entitled to summary adjudication of the fourth cause of action against the NetApp Defendants because each element of their claim for intentional interference with contractual relations is proven by their undisputed material facts. (Ps’ Mem. Ps. & As., p. 8:20-23.) Specifically, Plaintiffs argue that there was a contract between APTFrame and Appirio (id. at p. 9:7-12); the NetApp Defendants were aware of the contract between APTFrame and Appirio (id. at pp. 9:13-10:6); the NetApp Defendants engaged in acts designed to disrupt that contract and intended to interfere with the contract (id. at p. 10:7-22); and they suffered substantial damages as a proximate result of the NetApp Defendants’ interference (id. at pp. 10:23-11:7).

Assuming for the sake of argument that Plaintiffs’ meet their initial burden, the NetApp Defendants present evidence that raises a triable issue of material fact. With respect to the element of knowledge, NetApp Defendants submit the declaration of Vaillancourt. Therein, Vaillancourt declares that she had no knowledge of the contract between Appirio and APTFrame, or its terms, and she was not aware that there was any type of contractual relationship between Appirio and APTFrame until late May 2013. (Vaillancourt Dec., ¶¶ 3-6.) This evidence is sufficient to raise a triable issue of material fact regarding the NetApp Defendants’ knowledge of the contract between Appirio and APTFrame. In addition, regarding the element of intent, the NetApp Defendants submit Vaillancourt’s declaration, in which she declares that she did not intend to interfere with the contract between Appirio and APTFrame. (Vaillancourt Dec., ¶ 12.) This evidence is sufficient to raise a triable issue of material facts regarding the element of intent.

As there is a triable issue of material fact with respect to the fourth cause of action, Plaintiffs are not entitled to summary judgment of the 5AC as alleged against the NetApp Defendants or summary adjudication of the fourth cause of action. Accordingly, Plaintiffs’ motion for summary judgment of the 5AC as alleged against the NetApp Defendants and summary adjudication of the fourth cause of action is DENIED.

C. Seventh Cause of Action

In the seventh cause of action for violation of Business and Professions Code section 17200, Plaintiffs allege that “[t]he action of [the NetApp Defendants] as described in the Fourth Cause of Action … also constitute violations of Business and Professions Code section 17200 as they amount to unlawful, unfair, or fraudulent business practices.” (5AC, ¶ 82.) Plaintiffs allege that “[t]he intentional interference by [Vaillancourt], a high-level officer of [NetApp], with the contract between Appirio and [APTFrame] and the efforts of [the NetApp Defendants] to prevent [APTFrame] from doing business with Appirio constituted unlawful, unfair or fraudulent business practices. (Ibid.)

Plaintiffs further allege that the NetApp Defendants violated Business and Professions Code section 17200 by: intentionally interfering with the contract between APTFrame and NetApp and giving “false and fraudulent reasons to [Plaintiffs] for [NetApp’s] refusal to do additional business with [APTFrame]”; giving false and fraudulent reasons for refusing to do business with APTFrame and Arcsona, “including republishing untrue and defamatory accusations of alleged misconduct by [Plaintiffs]”; fraudulently failing to disclose that they were refusing to do new business with APTFrame; switching the NetApp interns from APTFrame to WorkforceLogic and giving Plaintiffs false and fraudulent reasons for the switch; pursuing a personal vendetta against Plaintiffs and Arcsona in attempt to deprive Paladin of income; giving false or fraudulent reasons for refusing to do business with Paladin’s companies; using “false and defamatory allegations of misconduct against [Paladin]”; and giving false and fraudulent reasons for depriving APTFrame of income from the NetApp intern program. (5AC, ¶ 83.)

Plaintiffs allegedly “suffered economic injury and have been defamed per se and suffered loss of personal and business reputations.” (5AC, ¶ 84.)

“Business and Professions Code section 17200 et seq. prohibits unfair competition, including unlawful, unfair, and fraudulent business acts. The UCL covers a wide range of conduct. It embraces anything that can properly be called a business practice and that at the same time is forbidden by law.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1143.) A private party has standing to prosecute a UCL action unless he or she ‘has suffered injury in fact and has lost money or property as a result of the unfair competition.’ [Citations.]” (Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 555-556; Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758, 788.) Stated alternatively, to satisfy the standing requirements of the UCL, a party must “(1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp. v. Super. Ct. (2011) 51 Cal.4th 310, 322, italics added.)

Plaintiffs argue that they suffered actual injuries to their businesses and reputations such that they have standing to sue. (Ps’ Mem. Ps. & As., pp. 11:20-12:5.) Plaintiffs contend that their “present property interests” were diminished and they were “deprived of money that they would otherwise have earned and had their time wasted in futile efforts to provide contract workers for NetApp and Appirio.” (Ibid.) In support of their contention, Plaintiffs cite UMF Nos. 84-87. (Ibid.) Those undisputed material facts state that: “Paladin suffered substantial emotional distress damages as a proximate result of the interference with the APTFrame/Appirio contract by defendants Vaillancourt and NetApp” (UMF No. 84); “Paladin suffered injury in fact” (UMF No. 85); “Paladin suffered economic injury” (UMF No. 86); and “APTFrame suffered injury in fact” (UMF No. 87). In addition, UMF No. 88, which Plaintiffs’ cite in their separate statement in connection with the issue of standing, also provides that “APTFrame suffered economic injury.”

These undisputed material facts are insufficient to establish that Plaintiffs have standing to prosecute a UCL claim. First, UMF No. 84 simply states that Paladin suffered emotional distress as a result of the NetApp Defendants’ alleged conduct. Plaintiffs do not present any legal authority or reasoned argument explaining why emotional distress may properly constitute an economic injury sufficient to confer standing under the UCL. (See Badie, supra, 67 Cal.App.4th at pp. 784-785; see also Schaeffer, supra, 215 Cal.App.3d at p. 619, fn. 2 [“[A] point which is merely suggested by a party’s counsel, with no supporting argument or authority, is deemed to be without foundation and requires no discussion.”].) Moreover, it is readily apparent that emotional distress, in and of itself, does not constitute a loss or deprivation of money or property. Thus, UMF No. 84 does not establish that Plaintiffs suffered an economic injury.

Second, although UMF Nos. 85-88 state that Plaintiffs suffered injuries in fact and economic injuries, they do not provide that those injuries were caused by the NetApp Defendants’ alleged unfair business practices. Thus, the undisputed material facts cited and relied upon by Plaintiffs fail to demonstrate that Plaintiffs have standing to prosecute a UCL claim. As a result, Plaintiffs fail to meet their burden with respect to the seventh cause of action and the Court need not address Plaintiffs’ remaining arguments.

Accordingly, Plaintiffs’ motion for summary adjudication of the seventh cause of action is DENIED.